Chapter 12
For Your Interest: The World of Bond ETFs
In This Chapter
Examining the rationale behind bond investing
Recognizing different kinds of bonds
Selecting the best Canadian and U.S. bond ETFs for your portfolio
Considering foreign bonds
Knowing how much to allocate
As we write this book, many investment experts are saying that fixed income is for fools. Interest rates are so low that it’s nearly impossible to make a buck in bonds, especially Government of Canada bonds. To make matters worse, when interest rates rise — and they will — bond prices will fall. So, in some ways, these pros are right; it’s hard to make any moolah in fixed income.
Yet, people have been flocking to bonds. According to EPFR Global, a company that tracks mutual fund inflows and outflows, a whopping $470 billion went into fixed income funds in 2012, while $70 billion left equity funds. So, should you be in bonds or not?
The short answer: Most definitely. If equities are a wild Canada’s Wonderland roller ...
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